U of M study: CapX2020 created a ‘new era’

The multi-state approach to transmission planning and development is re-shaping the electric power industry, according to a report from the Humphrey School of Public Affairs.

On April 27, the University of Minnesota’s Humphrey School of Public Affairs released a report that highlights the achievements of CapX2020, describing the organization’s accomplishments as “remarkable,” “heroic” and “an example that other utilities can and should emulate as they cooperate on regional projects.”

CapX2020 is a joint initiative of 11 utilities in Minnesota and Wisconsin that worked together to plan, develop and build $2.1 billion in new high voltage transmission lines spanning nearly 800 miles in the Upper Midwest. Great River Energy’s Vice President and Chief Transmission Officer Will Kaul co-founded the organization in 2004 and has been the chairman of the organization since it was formed.

Collaborate, trust, lead, succeed

According to the report, “Transmission Planning and CapX2020: Building trust to build regional transmission systems,” regulatory risk and the need for coordination and trust among utilities and other stakeholders were major challenges the organization faced.

“These coordinated efforts were at the forefront of changing energy system planning in the United States, and have ushered in a new era of multi-state transmission planning and development that is re-shaping the electric power industry,” the report stated.

Prior to a 1999 Federal Energy Regulatory Commission Order, which required utilities and states to create regional transmission plans, utilities generally worked in pairs to build single transmission lines connecting their facilities. Researchers said the CapX2020 partnership was the first instance of a large group of utilities working collaboratively to address the transmission needs of an entire region.

The report said CapX2020 achieved success by building a strong coalition of utilities that had the resources to finance and manage large-scale projects, and the political influence to ally with a broad range of stakeholders to change laws and regulations.

“The utilities in this region were able to step up, even during a time of significant uncertainty, and discharge their ‘obligation to serve,’ while at the same time creating a political foundation for regulatory reforms necessary for the success of the endeavor,” said Kaul.

Investment paying off

Kaul said one of the purposes of the study was to assess whether CapX2020 delivered on its promises.

“I believe the report demonstrates that, and more. It especially highlights the benefits to electric consumers of collaboration across the utility sector in the region. Collaboration is a very efficient business model,” he said.

Kaul said that while the investment was significant, it is paying off.

“The value delivered in terms of reduced congestion, market access, improved community and regional reliability, and system resiliency more than offset the cost,” said Kaul.

Researchers interviewed 32 individuals directly involved in the CapX2020 projects, including state and federal regulatory commissioners, utility employees, lawyers and landowners. They also reviewed more than 100 documents including technical studies, government reports and newspaper stories.

CapX2020 now

The last of the four original CapX2020 projects, the Hampton-Rochester-LaCrosse line, will be completed in September. CapX2020 remains active in state and federal transmission policy matters and is one of the collaborative forums where Great River Energy participates in studies of future transmission needs.

The CapX2020 utilities are Central Municipal Power Agency/Services, Dairyland Power Cooperative, Great River Energy, Minnesota Power, Minnkota Power Cooperative, Missouri River Energy Services, Otter Tail Power, Rochester Public Utilities, Southern Minnesota Municipal Power Agency, WPPI Energy and Xcel Energy.

Read the report online.